masterpiece to watch tonight? then don't miss my friend's hot new show "crime inc" art for the taking. tonight at 10:00 p.m. around on cnbc. right here on "mad money," i'm jim cramer, see you tomorrow. hey, larry, what do you have for us? >> all right, jim, question, is this rally in the stock market over the past year signaling obama as our next president? this is the kudlow report. the fbi is on the ground in libya investigating last week's

assault on our embassy there which resulted in the death of four officials including our ambassador. and today after more than a week of denials, the white house finally admits it was a terror attack. unfortunately they have been lying to us for more than a week for political campaign reasons and i think it's emperative that ambassador susan rice step down immediately. and going to ask homeland security team -- mitt romney, one reason why obama's polls are looking stronger could be the stock market owning investor class. he's very happy with a 25% gain just over the last year. and new studies show that stocks predict elections better than any other variable. but first up, after nine days, the u.s. government is finally calling the consulate attack in benghazi, an act of terrorism. the fbi now on the ground in

libya. here's the latest. >> caller: good evening, larry, the fbi has arrived in tripoli, libya where they are carrying out an investigation. certainly on the ground there, they will try to visit the u.s. consulate and perhaps speak to libyans who were either security guards at the compound or eyewitnesses. libyan officials tell us that they have about 50 individuals that are in their custody. but keep in mind, these are not necessarily suspects, but people who could have valuable information as to who was -- according to libyan officials and others, early indications suggest that it might have been a group that was a very religious group but since then has become slightly more extreme, even by libyan standards. the group itself denies that it had know operational link to

that group. the group also is within itself somewhat divided and there's no doubt that in the coming days we'll learn more about it and what role they have in this attack that seems to be the focus of the investigation as it stands now, larry. >> all right, many thanks to amon. appreciate it very much. as i mentioned earlier, after nine days the u.s. government is finally calling the consulate attack in benghazi an act of terrorism. but here are the falsehoods being spread by obama's u.n. ambassador susan rice during the past week. >> this is a response to hateful and offensive video that was widely disseminated throughout the arab and muslim world. >> you do not have information at plenty that leads us to conclude that this was premeditated or preplanned. we don't see at this point that this was a coordinated attack. this began as a spontaneous, not a premeditated response to what

had transpired in cairo. >> now all of a sudden they acknowledge it's a terrorist attack. i want to know why ms. rice -- was it for political campaign reasons, here now is the chair of the house homeland security committee, peter king, republican from new york that knows more about this than anybody. >> was she lying? i mean people knew that our counter terrorist experts knew that this was going on. was the white house lying, did they send her out for political reasons? >> i think they definitely sent her out for political reasons, because the obama administration wants people to believe that the obama administration has won the war on terrorism and that's just a few mall contempts in the muslim community. with the election just five weeks away, they did not want to admit that al qaeda is coming

back. they have a number of offshoot such as al sharia who was very actively involved in this. there's no way they could have honestly said this was a terrorist attack. there was some confusion as to who was actually involved. when you look at september 11, there was a heavy al qaeda presence in that area. there was a heavy al sharia presence in that area. and there's al qaeda in the mod dueler sense in that area. these islamist militias who have tons of weapons left over from the government. rockets, grenades, mortar rounds. >> ambassador stevens himself had told people that he was on the al qaeda hit list. and, look, the counter terrorist guy, matthew olsen, he's the director of counter terrorism. he pulled the plug on the administration publicly in

hearings in the past week. this with us a cover-up. i see this as a cover-up. now they're coming clean. what's the penalty here? what does this mean? they can't be allowed to get away with this. >> all of us are indebted to matt olsen for what he did. it's really up to the american people right now because what the u.n. ambassador did, what susan rice did to us was basically let down our allies who don't know what we're talking about, and seeing us as intentionally lying. it's also going to enbolden our enemies. you didn't have a leading smo i spokesperson going out and telling a story that was not true. i think the only real response right now is for the american people to realize how much this administration has politicized foreign policy and also how much it has failed. this foreign policy despite what the president says has not been a great success at all. >> why shouldn't she resign?

and by the way, peter, you and i both know, yboth of us have worked in the government, you're still here. the buck stops at the very top. first of all buy shouldn't rice be forced to resign right now? >> well, either she should fall on her sword, probably the only reason why is because she was doing what the president wanted her to do. and really it's the president that -- the american people should vote against him because of that. she had the exact same talking points. she was totally structured as to who she was supposed to say, what she had to say, she carried out her orders and in doing that, she did a disservice to the nation. >> one of the organizers of this tragedy is this guy ben cumo. this was a guy that was let out of gitmo in 2007 in the bush

administration's waning days when i think they just kind of lost it. he got out of gitmo in 2007. now from what i gather and i want to get your take on this egypt is trying to negotiate so the so-called blind chic who was the master mind of the 1993 world trade center bombing, they want him to be let out of prison. how is this possible? how can anyone even consider this after what's just happened? >> well, on the first point, gitmo the administration new he was there. we testified about how active he was in eastern libya near benghazi. we knew he was there when there was no terrorist involvement. there was eight committee chairman and subcommittee chairman based on our own sources of information, people in the government, primarily in law enforcement who told us that this is being discussed. we sent a letter to the secretary of state and to the attorney general asking them whether or not there is any discussion at all of the blind sheik being transferred. the answers we got are too cute.

the state department says there is no plan at this time and they're not aware of any recent contact from senior officials on this issue. so they're not denying it. all they have to say is that the blind sheik will die in an american jail. no one is saying that. the only reason i can consider it is the president's whole apology approach, if we're nice to them, maybe they won't attack us. >> that gets us into much trouble, this idea of denying it. does this administration understand that there is still a war on terror going out there and that the world, especially in the middle east is an extremely dangerous place and it's extremely dangerous for america and american citizens, do they understand that? do they have any clue? >> i don't think the president allows himself to think that. he feels that so long as he can pick off the occasional leader, the islamic terrorists are going to end up coming over to our side. in many ways al qaeda is more

dangerous today than it was on september 12, 2001. i saddam is gone, it's here in our country and there's any member of al qaeda offshoots that war is still going on, they're ready to strike at a moment's notice as they glen straited last week. >> peter king. coming up on kudlow, obama a redisbugsist. this is not the first time he said and it's not the first time he's said it and it won't be the last. the exact opposite of redistributionism. i'm kudlow, we'll be right back.

did

. welcome back to the kudlow report. here's the tach of president obama talking about redistribution. >> i think the truck is figuring out how two we structure government systems that pool

resources and hence facilitate some redistribution, because i actually believe in redistribution, at least at a certain level to make sure that everybody's got a shot. >> all right, there you have it. the question is what is worse, obama's redistribution, or his 15% remark. tony, great editorial in invest's business editorial. this is not the first time, that was 1998 for his redistribution thing. but what they chronicle is in 2001 he went through a whole speech where he bragged how you can have coalitions in government and redistribute. then he comes back as we all know in 2008 when he told joe the plumber, i think when you spread to the wealth around it's good for everybody. the pattern is there, he's said it many times over ten years, why didn't people get this? why didn't people understand

that this is what he's all about? >> many people got it, it's a question of who reported i. with a new media, hearing a lot of radio like you do, is the vetting by the president. the lack of vetting by this main stream media, that was complicit in getting him elected but didn't know anything about him. that requires investigative journalism. >> i know for two or three days the joe the plumber remark, what did he say, we have to spread the wealth around, that was one of the most important statements of his philosophy and ideology. how could you not have known that? he spelled it out, spread the wealth around. >> so let's not blame the people of 2008 for 2008, let's learn to be forgiving, loving people.

they had this press on it 24/7. joe the plumber, he's now running for congress in ohio and hopefully will do very, very well there. >> just quickly, the 47% of market romney. which is is worse? >> it's really a question of how it plays, and the answer is obama's remark about redistribution. the 47% remark had to do with how he gets votes and getting that 5% to 10% of the independents. it wasn't about caring about americans that was the gross misrepresentation by the main stream media. >> there's a new obama, i'm not sure what it means, he's changing washington from the outside. >> the most important lesson i have learned is that you can't change washington from the inside. you can only change it from the outside. >> i have no idea what he's talking about. but i want to put up the mitt romney response to this. because romney just slammed him for it. >> the president today threw in

the white flag of surrender again, he said he can't change washington from inside, he can only change it from outside, we're going to give him that chance in november, he's going outside. >> first of all, what is obama talking about? he is the ultimate insider, he is the incumbent president. is he saying vote me out? >> first of all i would only hope and pray i because that would be the smartest thing the man has said in a long time. this all goes back to the 2012 dnc. in 2008, it was all about me, president obama. >> he's saying you the voters on the outside, come to me, don't dessert me, i need intensity, i need enthusiasm in order to change? is that what he's saying? >> sometimes he loses it and he says weird things. >> it depends on where he is. i think that's very, very true. >> he didn't really build that

business, we can't change from the inside, why is he president? >> i have never hung out in an adjunct lectures room and listened to how they talk to each other before they go in and teach a class. maybe this is how they talk to each other. when you put patches on your sleeves maybe you eget into this mind set. it is a bhilt flag of surrender, if the president can't move forward effective policy, we don't need him. >> 2008, the two best polling organizations according to to a study was rasmussen and pugh today pugh reported an 8% obama lead. and i take it very seriously. question is romney out there pounding obama's redistribution remark? saying i want growth, this guy wants redistribution. i want opportunity, this guy wants -- is he pounding? because he may be at that point where he's got to start pounding. >> i don't think he's doing it

enough and it's one of romney's problems and when you go to those supersecret videos, it was romney being tough, it was romney being honest. he didn't get the 47% correct but he has the thesis. we got to see more videos about this, we have to see more happening online. >> big government entitlements versus opportunity and growth. how simple can that be? romney is a terribly smart man, i have known him, i have interviewed him buy can't he blast away at big government entitlements versus an opportunity society for growth. >> never confuse the issues. i want him to be a smart man, i also want him to know how to ball his fist. that's the issue. in the thee rhett kl not in the actual. in the thee rhett kl you have to be able to ball your fist and punch through. >> right now i these everybody's confused.

coming up, why is president obama trying to kill the coal industry? that's next, killing coal. now, that's what i call a test drive.

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alpha natural resources says it will immediately close coal mines in west virginia and pennsylvania. this -- own water against president obama's war on coal. why is obama trying to destroy the coal industry? here now the west virginia congresswoman shelly morcapito. why is obama waging war on coal? >> i think he's being driven by an extreme environment by an lobby he doesn't like coal, he said if you build a coal plant, we're going to bankrupt you and he's following through on his promise. >> that means we will not have

another new coal plant in our lifetime. that's the way experts have said it, that they'll never be able to get done what the epa wants to get done so there will be no new coal mines. >> so we're shutting out our most affordable, abundant resource. my state of west virginia will lose a lot and has lost a lot. >> a lot of states too. i get that, but what about the existing coal mines, shelley? tell me about that because the epa is writing regulations now and a lot of people from that industry say basically they're going to have shut down even existing coal plants. >> the permitting process has slowed to a crawl and it's through the regulations of the epa and they put in impossible deadlines and impossible benchmarks to meet and at the same time you've got the district court here in d.c. who has four times told the epa, you're overreaching, you're

regulating instead of -- it's where congress needs to be. and the reason congress isn't there is because we know that we don't want to shut off one of our best and most reliable energy resources. >> what do the coal miners association mean, are they with you on this? >> well, they're with us yes, because they're hard working west virginians, politically, they're staying out. i don't know how they take that position when they've got thousands of miners across the nation without jobs, but they have to make that explanation to their member hit. >> last one for you, what do you say and the coal lobby say to essentially natural gas, natural gas, the cleaner fuel with all this fracing and horizontal rilling, natural gas volume is falling. and it's a cleaner fuel than coal. >> i don't think we need to have

natural enemies here. i have got a lot of natural gas in my region as well. we welcome that, but we cannot shut down one of our most valuable resources. we need to keep coal as a baseline fuel because it's available, it will keep our manufacturing sector going and our jobs going, so sure, we want it all. the president says he wants an all of the above energy plan, but his actions say anything but coal and fossil fuel. >> you got a bunch of democrats helping you on this, because if he's re-elected, as you know, his epa is going to go after coal, i'm sorry to say. >> shelley moore capito, thank you very much. the stock market is a better indicator of an incumbent's re-election than unemployment or any other indicator. hot stocks say it's going to be

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welcome back to the ckudlow report, in this half hour, why is the top wall street executive switching to romney this year to president obama. what does he know that he didn't know then? and is failed obama policy the real cause of the violence we're seeing around the world. but first up, mitt romney beware, rising obama polls may be signaling more economic optimism from two key groups, stock market investors and homeowners and they are both highly likely to vote and stocks in particular may be very accurate predictors of the outcome. this is my father and honest evaluation segment tonight. people are feeling wealthier and they may be feeling happier and that may be fueling obama's polls. the pugh poll had obama up by

eight points, that is a bit of a shock. let's look at this for a minute. the stock market, you're up basically 25% over the past year, 25%. and that is not only a huge move, but it adds a lot. $3.5 trillion stay with me on this, $3.5 industrial of new wealth has come from a 25% rally in the s&p 500 over the past year, $3.5 trillion that's going to make everybody a lot happier. and i want to add to this point, stock market, the so-called investor class is usually the most group, the most likely to vote group of anyone out there and look what they have done. they're feeling better and that maze be wie obama's polls are getting better. now we show showed this chart last night, i want to run it again, because guess what? home prices another huge asset and wealth indicator. home prices are obviously improving over the past year, they're up about 10.5%.

that comes to this, here we go again, $1.9 trillion of added wealth because we have had a bump up in home prices, we're nowhere near the peak in 2006, 2007. but we're gaining on it. with regard to stocks, we're not so far from the peak in 2007. but my point is a very simple point, i want to be very honest about this, yes, i favor mitt romney's policies, but the stock market is an important indicator invests vote. and the house price appreciation may also turn out to be an important indicator. i want to chew on this with cnbc contributo contributors. david, good friend, you have to love this. we tried to get a little picture of a cute little pig and put some lipstick on it because you're going to be so happy that i'm even broaching this subject,

but i'm nothing if not fair and balanced. there's a study from emery university, came out last week, that shows for incumbent president, like your man obama, the stock market is a far better indicator than the unemployment rate, like far, not even close. all right david goodfriend, what do you have to say for yourself? >> if you remember when you had me on the show from the floor of the democratic convention, i spoke right before president clinton spoke and one thing i said if you're an investor and you ask am i better off than four years ago? and no one's talking about that because americans aren't feeling it. right after that, what did president clinton say? he said it takes a while for people to feel a recovery. that in fact employment is a lacking indicator relative to say, say, the s&p 500 and maybe what's going on now is what

president clinton alluded to that people are starting to feel and perceive a change. >> i think you missed the lay-up. the point here, let me go to my pal jennifer ruben. jennifer, i know you're not an economist, but you've got common horse sense. what i'm saying is a little different here, the stock market may be a leading indicator in the economy, maybe it is, maybe it isn't. the stock market kind of tells you the health, wealth and goodness of the country, or not. a rising market help incumbents, a rising market may be the best predictor of the incumbents, not just because there's an improvement in the economy, but because people get richer, they're up $3 trillion that's a lot of wealth and that makes them feel better about obama despite the that is correct that there are other bad economic

indicators. how -- >> in anticipation of the show, i did some home work this afternoon, i spoke to the romney pollster and i spoke to two inspected pollsters, one of whomt you like to quote an awful lot on this show. one said i'm not so sure about the theory. the polls go up and down in this race and they really have a relatively narrow down. they go up a little bit for obama. we haven't seen aside from one stray poll or another, a dramatic shift in the polling, so the fact that the stock market continues to go up, doesn't seem to match the ebb and flow in the polls. >> i want to come back to this point, though. the 2008 presidential election, the two best pollsters, scott rasmussen and pugh, now scott has the even up, there's no question. scott has the race even up. pugh just came out with their

poll. they gave obama an 8-point lead. that is big. that to some extent, i don't know if that's going to be the end result, i have no clue. but i'm saying to you, with the rising stock market, there may be a shift in attitudes. republicans are supposed to win the investor class by 10 or 12 points, jen, i don't think they are right now. >> they're not right now and i think there's a reason for that. >> by the way, i spoke to the other favorite pollster that you mention today. the reason the stock market is a good predictor, because it on it's own isreflection of the stock market. buy do we have a good stock market? because it's been artificially inflat inflated. it represents the fact that we just killed the yields on the bonds and investors have no place else to put their money to

it's a true reflection on the health of the economy, i would say yes, i think this is completely artificial and not particularly good for the economy. >> before i get david back in, i want to go to steve. steve, i'm going to make this assertion, as somebody who helped coin the term investor class many years ago in the late 90s. he and bush new full well how much investors voted. can i say, steve, that if you talked to carl, mitt romney has not said a thing about investors in this. not one single thing, he just has not even addressed it. i once asked him about the stock market interview and he said it's because the stock markets are rising, but he doesn't address the investor class, and it's getting better, and investors may not do what they're supposed to two. are your ads going to go to investors? you got six, seven weeks? >> i think what 1yu7bd lies that i think is a really important

contrast that mitt romney and the rest of us need to make which is between barack obama who believes that the way that you create growth in this country is by growing government and creates more government investments versus mitt romney who does understand how jobs are created and that it's done by unleashing the power of the private sector. the current o'clock pant of the white house wants to raise their taxes to pay for these vision of a much larger government. >> why aren't you talk about that? i know you're distinct from the campaign. i agree with the point you just made, the capital gains tax is going to go to 35% to 15%. why isn't your man talking about that that would reach out to the investor class, and he's not doing. >> i think where most people live is below the stock market, they're suffering from not being

able to find full-time employment. >> you're not answering my question, my question is why aren't you making an ad. you want me to do the ad for you? i'll do it free of charge. i'll knock this out in three minutes, you have to say to investors if you elect mr. obama, he's going to jack up your dividends tax, he's going to jack up your capital gains tax. but you guys aren't staying tha, you're not going after the investor class vote who are the most likely to vote. >> the voter that we also have to reach and persuade and a lot of -- lift them out of really difficult economic straits. but you're right. that's another group to go after. >> david, the whole segment is based around you. i began with you and i'm going to finish with you. >> the reason why my friend here from american crossroads is not

putting out that ad because they know full well that the investor class is not son monolithic republican only voting group. it's a wide variety of society, people with pension funds, with 401(k) plans. take a look at the swing states, in ohio where the auto bailout was mighty popular. take a look at virginia. >> i'm not getting it then. all i'm going to say is this, 50% of -- hang on a second. 50% of households own stocks either directly or indirectly through pension funds, through 401(k)ings. >> but they're not all republicans. >> i never said they were republicans. my point is different, a successful republican candidate should win that vote by 10 to 12 points. stephen law, you're not on track, you're absolutely not on track.

jennifer, you may be right about the fed and liquidity, you may be right. david goodfriend i did everything i could to boost your cause tonight and we're going to have to talk more because you didn't get it. david, jennifer, stephen, thanks thank you for joining us. did iran attack the websites of a pair of major u.s. banks? and why is a major wall street private equity guy switching from obama to romney. what he know s now that he didnt know four years ago? president obama: i'm barack obama and i approve...

this message. anncr: he keeps saying it... mitt romney: this president cannot tell us that you're... better off today than when he took office. anncr: well... here's where we were in 2008... tv anncr: the worst financial collapse... since the great depression... tv anncr: american workers were laid off in numbers not seen... in over three decades. anncr: and here's where we are today... thirty months of private sector job growth. creating 4.6 million new jobs. we're not there yet. but the real question is: whose plan is better for you? the president's plan asks millionaires... to pay a little more... to help invest in a strong middle class. clean energy. and cut the deficit. mitt romney's plan? a new 250,000 dollar tax break for... multi-millionaires. roll back regulations on the banks that cratered the economy.

and raise taxes on the middle class. president clinton: they want to go back to the same old... policies that got us in trouble in the first place. president obama: we're not going back, we are moving forward. anncr: forward. all right, what did a top wall street executive miss in 2008 that is moving him into the romney camp in 2012? what does he know now that he didn't know them? arthur david is a congressman who switched parties. president and ceo of one of the nation's leading buyout organizations. okay, so what great revelation have you had that obama shouldn't be your man? >> i think it's something that's occurred over the course of the last four years, first in increments and i think after the 2010 election when it was clear

that we were on the wrong track, this country was definitely moving in a direction that did not deal with the fundamental problems that we had, particularly in the form of job creation, taking advantage of that which this country has always done well, which is the entrepreneurial spirit, take advantage of our natural resources, all of those things ended up -- actually ended up becoming misused by this administration. >> okay, great, but did you not hear, did you not hear obama say to joe the plumber, that there's going to be spreading of the wealth, a little spreading of the wealth. that should have been your first clue that this guy is not a capitalist and is not interested in your rate of return and was not going to let the marketplace -- >> i think what we have had is an administration that clearly does not have the experience at driving economic growth and doesn't even understand the fundamentals of economic growth and that's the reason that we have a jobless situation that is one of the most horrific that we

have faced since the great depression. >> but the stock market is doing great. >> i think one of our previous guests nailed it on the head which is that the stock market is looking to the fed to bail it out. >> but earnings have been great. i agree with you this time around, i thank you you got it right, romney has better pro growth policies, but earnings have done very well, earnings match the gain in stocks so it's not all the fed. >> and it's definitely true that i think u.s. industry has done the job it needs to do, if you look at what we have zone in terms of the technological revolution that hasl unleashed the ability to make a dramatic change in our energy situation and give us a competitive advantage over others if we fully utilize it that will allow us to bring jobs back to this country. >> you knew he was a greeny when he ran. i'm trying to figure out what it was intellectually that made you

change. because you had all this information in 2008. >> let me just talk about the disappointme disappointment. more sadness than anger. >> buyer's remorse. >> yes, with what's gone on with obama. i have also known mitt romney for a very long time. i have seen mitt romney in numerous circumstances, both in business circumstances, at the olympics, as a citizen of the state of massachusetts, when he was governor, i have seen him solve incredibly difficult problems i have seen him take analytical -- >> now you're giving me positive reasons for your change which i think are better than your negative reasons it. >> it's clear that we have not been in a -- >> do you think mitt romney can make a deal? >> yes. >> seriously we need a guy who can break down the numbers, get that power point stuff up and make a deal so that the economy can grow and we won't go into

bankruptcy. >> mitt's not only the deal maker we need. when he was the governor of the state of massachusetts he dealt with a state legislature that was almost # 90% the other party and yet he made significant improvements in the state's economy, he was able to work with the other side in ways that probably even they were surprised. so he has the ability to reach control the aisle and get people moving particularly when it comes to issues of the economy. and when you look admit's history in terms of saving and turning around the salt lake city games, if you look at what he did in terms of forming bain capital, it's not just a plan that's reformed. everybody says what's your plan, and he haslem a very detailed p. the fact is, he has the detailed plan that really reflects a philosophy, but more importantly, he has the ability to bring the people together and

all the right people to help analyze the problem. >> but you believe, and we video is same fiscal problems in 2008, you didn't think obama had that leadership skill. >> i would probably like to move off of '08 for obvious reasons. there's buyer's remorse. >> do you think romney's going to win? >> i think it's a 50/50 poll right now. look, mitt has been hit with the kind of caricature that the obama people have done that distorts who he is. i have seen who he is. if people had watched the convention, they would see some of the things that was not covered by the media that tells a lot about the guy. coming up next, is president obama responsibility for the mitt east simid east blowups in the islamic world?

this just in, national security officials tell nbc news that cyber attacks this week have slowed the consumer websites of jp morgan chase and the bank of america are being carried out by the government of iran a chase spokesman told cnbc that the website was having problems earlier today but is

now fixed. he declined to comment on whether the web problems were the result of terrorism or not. can this be blamed on president obama's policies, isn't it better to be feared unanimous loved? right now from the u.s., it looks like neither. general mark kimet thank you very much, sir. i talked about this last night, ma it's better to be feared than loved. i would say right now we're neither feared nor loved in the middle east and i think that's a big problem. >> in the past couple of years, we have come to have been seen as an international ally, we have spent years and years backing our friends in the region and then we have decided

to back away from those commitments we made. >> do you believe that president obama's policies are to some extent, maybe largely causing this new cycling of violence from the jihadist? do you think it's obama's policy? >> the real issue is what has happened since 2009 with regards to our ability to maintain our interests in the region. when we said the cairo that we wanted to have a new deal so to speak with the middle east, what they heard was you're leaving, we're leaving iraq, we're leaving afghanistan, we have less of a desire to stay engaged in that region. and in that vacuum, clearly what has happened is that others have taken advantage of this situation. >> you probably know this news, but it's being reported. you said we're leaving iraq, you're right. iran is shuttling weapons to

syria. >> there's no love lost between the government of nouri al maliki and the iranians. we have left iraq, they don't have the capability to defend their air space, even if they wanted to, we don't have a presence in there and they don't have the capability to do anything about it. so if iran wants to fly over their air space, we have left nothing behind to help them with that. >> given our unreliability as you put it, let me ask you, where do you go on the iranian nuclear bomb. suppose we wake up one morning and iran has a nuclear bomb. what would this administration do? do they have policies? two they have contingencies? what do you think their next step would be? >> they have been so focused on convincing the world that the iranians can't have a nuclear weapon, we're going to wake up one day and we're going to find out that they do have it and we haven't fought our way through the next steps, this

administration denies that they are considering any type of containment regime, but quite frankly, that's probably what we're going to end up with. >> speaking of denial. until very, very recently, this administration denied that there was a terror war. they never use that term anymore. i would ask you, sir, from your experience and looking at what is going on with this cycling of jihad and terrorism, is there a war going on? does this administration understand what that means? >> if there isn't a terror war, i don't know why this administration felt it necessary to kill bin laden. clearly there remains an ongoing effort on the part of al qaeda and its affiliates to conduct a terrorism war against the west and the united states and it's interests. >> all this flag burning, american flag burning, which burns me up, probably burns you up just as much if not more. should been united states retaliate in some way for this flag burning?

>> well t short answer is, it's more important than just defending the flag, it's defending our interests and our national requirements in that region. we have got to get engaged. we have got to get reengaged because if we don't, we're going to see more and more of this. >> many thanks, general mark kimet stayed up late for us in germany. i'm larry kudlow, we will see you tomorrow night. [ male announcer ] how do you trade? with scottrader streaming quotes, any way you want. fully customize it for your trading process -- from thought to trade, on every screen. and all in real time. which makes it just like having your own trading floor, right at your fingertips.

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